IETF Funding – Phase 3: What are the changes and how could you benefit?

DESNZ will be launching Phase 3 of the Industrial Energy Transformation Fund (IETF) in early 2024 providing total matched funding of £175 million for feasibility studies, engineering studies and demonstration projects in England, Wales and NI. Several changes have been made to the scheme that could benefit your company’s journey to net zero. The first IETF Phase 3 window will launch in January 2024 and close in April 2024.

The Industrial Energy Transformation Fund (IETF) competition aims to help energy intensive industries carry out feasibility studies, engineering studies and demonstration projects in England, Wales and NI with the provision of grant funding. IETF support provides a proportion of the funding for projects, with the rest match-funded by industry. The objective is to help companies cut their energy bills and carbon emissions through investing in energy efficiency and low-carbon technologies and reducing risks and costs of decarbonisation technologies by demonstrating relevant technologies.

A consultation was carried out in July 2023 with the aim to gain views on possible changes to Phase 3 of the funding scheme to come in 2024. The findings from this survey were used to formulate several changes to the scheme which are outlined in the section below.

For more information on the IETF consultation please see:

Future of the Industrial Energy Transformation Fund - GOV.UK (

Key changes for Phase 3 which might affect you

There have been several changes for the roll out of phase 3 that could make the scheme applicable to a wider range of projects:

  • The scope of feasibility studies has expanded allowing the inclusion of option analysis. This is where multiple technology options are considered to reach the same goal (which must still be in line with IETF requirements). This means technologies selected are likely to be more beneficial. This must be covered in one single feasibility study.
  • The IETF will now allow applications that may be affected by site relocations. This does not mean the IETF will support relocation projects only that the application or delivery for a project on an existing site would not be affected by the relocation. The scope and outcome of the study must remain the same throughout the relocation process.
  • Off-site infrastructure can now be considered as part of feasibility studies. This will make the deployment of projects less risky as off-site infrastructure will have been considered in the feasibility study. There however must be clearly defined limits to the study for it to qualify.
  • For deployment projects of value over £5 million, a feasibility study will now be required to support the application. This has been put in place to ensure all the necessary information is available to the IETF for higher value deployment projects.

The IETF has made an effort to widen the range of eligible technologies in phase 3.

  • Firstly, the scope of waste heat recovery projects has increased to allow non-industrial end-uses such as space heating and export to heat network, subject to further criteria.
  • The TRL for energy efficiency projects has been lowered from 8 to 7. This brings it in line with the requirements for decarbonisation projects. This is for both deployment projects and feasibility studies meaning technologies that were not previously eligible now could be.

Verco helps industrial organisations with net zero implementation support and the data and information required to access IETF funding. To learn more, please get in touch.

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